B2B and B2C — whenever I put these two words in a sentence, people give me that perplexed gaze. The look that says, isn’t it the same thing Katherine? And all the while I’m thinking; no honey, there’s more to it than meets the eye. People often get confused with these terms, but when understood, they appear as simple as their monikers.
Businesses involve a broad spectrum of models with one, single, the ultimate goal, and that my friends is the ever-popular sales. Understanding the diversities between these two business models is not that complex. However, it’s necessary so that you may opt for the right model depending on your business domain and vision. When chosen aptly, its structure will support your company to generate profits.
Table of Contents
What is B2B?
In B2B, companies are only concerned with commerce among themselves; as the name suggests, “Business-to-Business”. A business conducted between companies involving wholesalers, retailers, or manufacturers rather than individual consumers. Basically, they are business suppliers operating on a large scale to fulfill organizational needs. All their services and products cater to the official requirements of companies to help them flourish. These products can be anything ranging from digital products to marketing services, whatever the company needs to run.
Prominent Examples of B2B
Amazon
Started off as an online marketplace for books, operating out of a garage in 1994, Amazon is now a worldwide renowned B2B organization. As its logo depicts, Amazon has a wide variety of inventory from A to Z. Due to its abundant stock Amazon also works as a B2B service. It’s a multinational conglomerate working in eCommerce, retail, artificial intelligence, consumer electronics, entertainment, and several other sectors.
Alibaba
Alibaba group or Alibaba.com emerged in 1999 in Hangzhou, Zhejiang, now one of the most prominent B2B organizations in the world. It’s a Chinese multinational company specialized in retail, eCommerce, and digital services functioning in business-to-business, business-to-commerce, and also consumer-to-consumer spheres. Alibaba, the world’s largest retailer and eCommerce company, hosts the biggest B2B marketplace in the world. With its increasing revenue, Alibaba has been creating records every year.
EWorldTrade
EWorldTrade, another prominent pioneer of the B2B industry, is winning the game by its global network of buyers, sellers, wholesalers, retailers, and manufacturers. It is burgeoning online with a decade of experience in digital branding and web development, serving over 1M+ potential customers globally. It also offers digital solutions to help companies foster on a global level.
What is B2C?
B2C refers to commerce between an individual customer and a company. In simple words, it’s where a business sells its product directly to its consumer, hence the name B2C, business-to-consumer. It’s typically considered as consumer eCommerce. Their products and services are concerned with satisfying the needs of individual customers. Traditionally, it is people shopping from outlets; therefore, their products, services, and marketing are more emotion-based rather than logical. People are often bewildered since these companies also benefit from B2B for personal progress more in spaces dealing with inventory, marketing, and exposure online.
Examples of B2C
Accumulating 2.9 billion users by 2021, Facebook is world’s most used social media platform till date. It’s among the ‘Big Tech‘ of the U.S, considered to be the world’s most valuable company. It’s a very typical and common example of a B2C business where Facebook sells its products and services of social interaction directly to its consumers online.
Walmart
Walmart is an American retail corporation operating as a supercenter or department store at various places.
As of July 31, 2021, Walmart has 10,524 stores and clubs in 24 countries, operating under 48 different names – Source.
Consider it as an archaic example of a B2C business; they are a simple hypermarket from where people buy their essentials.
Tencent
Tencent or Tencent Holdings, world’s largest game vendor, is a Chinese multinational tech company. Amongst the largest social media and investment corporations, it is the most financially valuable company in the market today. They have been providing their products and services as social network, web portals, eCommerce, music, smartphones, payment systems, and games.
B2B v. B2C – Key Differences
Customer
We know that B2B is concerned with commerce among businesses; therefore, the customer of a B2B company is yet another organization. In fact, a B2B company is mainly focused on the decision-makers of that organization. All their tactics and strategies are directed to satisfy and please them through campaigns and offers that come real-world, look and feel.
The customers of a B2C organization are its direct consumers, the general people. Therefore, they can hook anyone to buy their product as their operations are directed towards the fulfillment of ordinary people.
Goal and Purchase Motivations
B2B customers are established organizations who are focused on ROI, efficiency, and expertise. They are concerned about the growth of their organization when it comes to trading. Their purchase motivation is effective information and comprehensive detail regarding products and services. Thus, the goal of a B2B company is to drive its customers through logic and financial assurance.
B2C, on the other hand, has individuals as the customer who are not worried about affecting the whole organization based on their purchase decision. Their purchase is simply to fulfill their personal needs. People usually seek deals and are driven by creative and quality marketing; thus, B2C companies are focused on attracting them with new tools, tactics, and tricks.
Marketing Strategies
Even if a person hasn’t bought anything from a specific B2C company ever, the company can make the person its potential customer anytime, anywhere. All it takes is to elicit interest for their product through appealing marketing. B2C customers are intrigued by creative and heart-rendering marketing. Anything that tempts and engages is good to go.
B2B, on the other hand, needs to provide logical reasoning and financial motivation through their marketing. Their customers seek long-term solutions and profitable investments. Thus, the marketing strategies of a B2B organization are based on logic and robust information.
Decision Making Process
B2B customers are looking to establish a long-term relationship through their big investments for further profitable deals. Therefore, as mentioned above, they seek long-term solutions. Before making a purchase decision, B2B customers usually converse with the decision-makers of their company and other members in command. They ensure their decision doesn’t affect the growth and development of their company by determining a prospective deal. It’s a cognitive process that involves opinions, reasoning, research, trust, and guarantees.
People make impulsive decisions when it comes to buying their personal stuff. They are usually driven through emotions. All they’ve got to worry about is their own budget, not even at all times. They just make quick decisions based on intuitions or personal liking since they are not looking for long-term relationships or solutions. Hence, it’s a short and quick process involving emotional investment.
Buying Process
A B2B buyer’s journey consists of three stages; Awareness, Consideration, and Decision. These stages involve complete research and thought. Throughout the purchasing process, the customer deals with account managers and salespeople. In the awareness stage, they figure out their problem, educate themselves, and comprehend if the deal will be effective to solve it. In the second stage, they gather opinions of the people in command, understand the available approaches and opportunities to take the deal into consideration. The last process involves guarantees, authentication, and documentation.
On the contrary, the buying process of a B2C customer is short and concise. They make a quick decision on their own and make their payments right then and now.
Understanding the differences between these two business models, what do you think suits best for you and your operating model?
Which would you prefer?
